| This week, how tech is transforming the auto industry, including an insider view from a leader at Volvo Cars. Plus, HR's role in pushing organizations forward and a former US chief performance officer on the skills necessary to thrive in our constantly churning era. |
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| Computers on wheels. Anyone who has bought a new car in the past few years knows they are more software than hardware. In fact, technology is transforming every facet of the auto industry, from the way cars are made and how they run to how they are bought and sold. As disruptive new players and services materialize, a modern mobility ecosystem has emerged as well, built around end users' needs and preferences. These shifts were going on before the COVID-19 crisis, but the pandemic has underscored how integrating business and technology delivers value. Here's what you need to know about the biggest trends propelling the industry: |
| Connected cars. Connectivity and the explosion of the Internet of Things mean that automakers can offer a more seamless, personalized ride. Although fully autonomous cars could be a decade or more away, advanced driver-assistance systems now use automated technology to make grinding commutes easier. Through the use of sensors and cameras, safety features detect blind spots, help drivers maintain a safe distance from other cars, and automatically apply emergency braking. |
| Steel and software. Another big industry shift is the increasing emphasis on software in auto manufacturing. Many of these disruptive mobility trends, including autonomous vehicles, connectivity, electrification, and shared mobility, depend on cutting-edge software to improve vehicle performance. The industry's strongest software developers report roughly three times greater productivity and throughput, and six times higher quality, than the lowest performers. What's more, poorly designed software could lead to recalls, while driver safety might be compromised by malicious cyberattacks. Yet less than half of the R&D executives in a McKinsey survey said they were prepared to shift operational tactics to develop the necessary expertise in software development. |
| Customer experience. Our research shows that consumers are keenly interested in connected-car features. In a survey on future mobility trends, nearly 40 percent of respondents said that they would switch brands for a better connected-car experience. The use of connected-car data also represents an important opportunity. We identified nearly 40 use cases that could represent up to $400 billion in value by 2030, including adding in-car entertainment options and using data to help fleet operators manage vehicle maintenance.
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| Done with dealerships? Digital channels are becoming more important for buying cars—a change that the pandemic has greatly accelerated. Our consumer surveys indicate that at least a third of customers in Asia, Europe, and North America prefer to use digital sales channels, such as a company's website or mobile app, when purchasing a car. Automakers have revealed new digital sales tools that take shoppers through each step of the car-buying process, from selecting a vehicle to applying for financing to home delivery of the new car. That makes haggling over dealership prices a thing of the past. |
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| INTERVIEW |
| Volvo's credo: ‘Learning by doing’ |
| Björn Annwall, leader of Volvo Cars in Europe, the Middle East, and Africa, recently spoke to McKinsey about Volvo's approach to capability building. He warned that the skills and capabilities which made automotive companies successful in the past are no guarantee of future success. “We need to become much better at driving change and transformation,” Annwall said. “We need leaders who can work much more cross-functionally—who can get different domains and competency areas to work effectively together toward the same goal.” |
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| THREE QUESTIONS FOR |
| Beth Cobert |
| Beth Cobert is chief operating officer of the Markle Foundation, CEO of Skillful, and one of a handful of people to serve as chief performance officer of the United States, a role created by President Obama in 2009.
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| What skills will employers look for in every employee in the next ten years? |
| For virtually every job in the world, basic digital literacy will be an absolute requirement. Even today, eight in ten jobs for individuals who don't have a bachelor's degree require a basic level of digital literacy. |
| We're not talking about coding skills; we're talking about “using technology” skills—knowing how to operate a smartphone or a computer and how to use basic productivity tools for office work. As we go forward, that will be a requirement for virtually every job. We need to make sure that people have the opportunity to build those skills and that they have access to computers, phones, broadband. |
| This past year has also taught us that the ability to be adaptable, to solve problems, and to learn in a swiftly changing environment will become increasingly important. We need to help people build the self-awareness, the communication skills, and the resiliency to adapt to a changing world. |
| What should companies do differently to benefit from and build a diverse workforce? |
| The first thing employers should do is to look for skills, not credentials. They should write job descriptions that are focused on the skills relevant for a job, as opposed to simply repeating what they've asked for in the past. For many jobs, there are requirements listed in the job description that no one in the company has really thought about. So it starts with being clear about what you're looking for. |
| The most important thing for companies to do is to just get started. Many companies are making public statements today about wanting to build a more diverse workforce, but how do you move from intent to action? There's no better way than to choose a few roles in your company, do a few pilots, and use that experience to learn—as opposed to trying to design the perfect system. |
| What new, or newly important, skills should leaders of organizations hone if they want to be successful in the future? |
| The ability to listen becomes even more important for leaders in a world where there are so many different kinds of input and paths going forward. As a leader, how can you tap into insights in your organization and hear from the broad range of diverse voices? How can you create forums for that? Technology has shown us new ways to do this. It's amazing how many more meetings you can attend when you don't have to get on an airplane. |
| The ability to deal with ambiguity is also really important, and leaders need to role-model that themselves: they need to show that they're wrestling with real choices and that they, too, are building their own capabilities. They should think hard about how to achieve a balance between leading and setting clear direction, while also listening and being adaptive. It's important that when you do change and adapt, you explain to people why you've done that—not just so people can understand the rationale behind the change but also so you can role-model the kind of leadership behavior that will be effective in moving an organization forward. |
| — Edited by Belinda Yu |
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| BACKTALK |
| Have feedback or other ideas? We'd love to hear from you. |
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